Leadership, Diversity and Data: How Hiscox Stays on Top in Insurance | Stephane Flaquet, Hiscox

by Juan de Castro, COO Cytora

In this episode of Making Risk Flow, host Juan de Castro speaks with Stephane Flaquet, the Group Chief Operations and Technology Officer at Hiscox. Stephane is a financial services professional with broad experience in all aspects of operations, technology, and change management. Stephane’s love for the industry spawns from the social purpose of insurance, and the responsibility of protecting clients' assets, as well as the industry's ability to be a great place to combine people and technology.

Together, Juan and Stephane discuss the vital roles of culture, leadership, and data in the insurance industry today. The pair also highlight how Hiscox's unique culture has contributed to its success, explore the essential characteristics of strong leadership and the challenges of maintaining a thriving culture as a company grows, why diverse teams increase business performance in insurance, and what insurance professionals can learn from elite sporting teams.

Listen to the full episode here

Juan de Castro: Welcome to another episode of Making Risk Flow. Today, I'm joined by Stéphane Flaquet, Group COO at Hiscox. And I'll start by saying he's one of the most inspirational leaders I've worked with. And one of the reasons he's got such a strong followership are his leadership skills. And in full disclosure, Stéphane and I used to work together and we are good friends. But when I used to work with Stéphane, I think one of the things that struck me was he's got this unique balance of real devotion to developing people. I think that is one of the areas where he finds his energy. While at the same time, he's got really high standards. I remember he was probably the best prepared person in every meeting I joined him. And he's got a very strong determination to continuously improve how things work and avoid complacency. And I think this results in his very genuine style of brutal honesty, no BS type of approach that makes people around him excited. So thank you, Stéphane, for joining me today. It's taken me months to get you on board, but we've finally made it happen.

Stéphane Flaquet: Thank you, Juan. Obviously, a very flattering introduction and blushing. But yeah, delighted to be with you finally today. And thank you for having me.

Juan de Castro: Definitely. So let's focus today's episode on the role of culture and leadership in the ability of an insurer to evolve and keep winning in today's environment. As I mentioned, this is one of your many areas of strength, and I thought that was a very interesting topic. But let's start with an overview of your current role and your background.

Stéphane Flaquet: So as you said, I'm the group CEO for Hiscox. I've been with Hiscox 14 years now, although I've had the opportunity to do many, many things in that period. And it doesn't feel like 14 years. My current responsibility includes a typical CEO job in a financial services organisation. So technology, operation, change, data. I also look at a range of corporate services, procurement, property services, real estate. But I also have the pleasure of also doing group claims and group marketing. So it's a bit of an unusual role. Before that, I've had the opportunity to lead a European business. I also led a UK business on an interim basis, and I was also a European CEO. And then before going into insurance, I spent a bit more than 10 years in banking as well. So I'm a financial services guy through and through.

Juan de Castro: But clearly you've had quite an unusual career. You've done COO, CIO, almost pretty much every function within insurance, and then plus a number of years in banking. So what has driven those choices? Was it part of a plan you had 15 years ago, I want exposure to different roles or how did that get formed?

Stéphane Flaquet: It was absolutely part of a big plan. I guess I just have a business school finance background. I started as a financial analyst and I guess it's just a series of opportunities. I've been fortunate to be, I guess, in the right place at the right time. I mean, I shouldn't say this, but I've never really had any career plan. I remember sometimes I would interview and then HR person would tell you, oh, where do you see yourself in 10 years? And I would, for me, that was like the worst question ever. It's like, I have no idea where I'll be in 10 years. So I think he's just been very fortunate to grab the opportunity. I guess if I reflect back over the last 28 years now, I've tried to stick to a bunch of principles. One is to enjoy what you do, or at least most of it. I can't bear the idea of just dreading to come to the office every day. That's just not for me. So I'm trying to do something that I enjoy. I believe that if you enjoy what you do, you're more likely to be good at it. And if you're good at it and you operate in the right environment, which has definitely been my case in the last 14 years with Hiscox, then the right opportunities will come up. And when those opportunities come up, then you have to be ready to take some risk and to trust the people around you. So that's what I've been doing, right? Try and find opportunities that I enjoy to the best of my ability, and then grab these opportunities that come up and take some risk. I guess also, the more you change role, the more you adapt to new situations, the quicker you're able to grasp the new environment, the better you become at it. And then people trust you to get on with new situations or new problems as well. So it's a bit of a vicious cycle, depending on the kind of job you want to have.

Juan de Castro: So we worked together for six, seven years. And as you said, you made a few changes, non-obvious changes. But I think if I had to say like, the common denominator across all of them is you were jumping to an opportunity to fix something. So I always saw you as the Mr. Wolf in Pulp Fiction type of role, right? There was something that wasn't working. Often it was something complicated. And perhaps because of your diverse background, you were the right fit. Is that the type of challenge that you enjoy?

Stéphane Flaquet: I do enjoy that. I do enjoy the opportunity to fix complex problems with others. Absolutely. Then when you do that once or twice, You get a bit of a post-it on your forehead. He's a problem fixer. He's a doer. He can get stuff done. And then that becomes a little bit dangerous because when there is something which is not quite right, and in any organisation, there's always problem children, then people naturally think about you as the person who can go and fix this. As you get older, which is okay, at some point you want a bit more stability. You don't necessarily want to go from one fire to the next, to the next, to the next. And also, you want to have enough time to see the result of your action. I realised personally, not that it was part of the design, but I've always been on a sort of a four or five year time horizon. Because it feels like you jump into a new opportunity, you have a lot of energy. It takes you between 6 and 18 months to make an assessment of the situation, change the leadership, and have a bit of a plan. Then two to three years to execute that plan. And then you get to four to five years and you say, okay, now it's probably the time for someone else to come in and take it to a better place. So just be careful what you wish for. When you sometimes have this reputation of getting stuff done, it can be a bit of a curse because you can move from one problem to the next. I haven't felt that recently because my current job is a mix of things which are working quite well. And I'm trying to evolve, and sort of build to the next phase. There's also some new capability built. So it's not only problem solving. So I'm very fortunate that there's a lot of diversity, but that's true that I've had a bit of that reputation.

Juan de Castro: But you're right. You see many other leaders that jump from one role to another every two years and almost always think they spend enough time to really fix and prove it was fixed. Whereas you, I think you do the full cycle of analysis, design a solution or an evolution and then prove it's working before you move almost to the next thing.

Stéphane Flaquet: I mean, in our business, there's quite a lot of latency everywhere. So the stuff we do today will have an impact in two to three years. And it's actually quite nice. I mean, I've had the opportunity when I left Europe, my successor was Robert Dietrich, someone that I think you know as well. And it's so nice to see that actually someone comes in, build on what you've done and just take it to the next level. Because at least for 6 months, 12 months, some of the early results have to do with some of your actions. So there's nothing better than having a successor that takes your work and takes it to the next phase. There's nothing worse than having a successor that does the opposite as well. But that's a different story.

Juan de Castro: And knowing Robert, I'm sure he's also fixed many things that you left behind, he's such a fantastic guy. And so you worked on insurance and financial services, you said, for 15, 20 years. Obviously, we call it financial services, the whole industry, but quite different banking from insurance. What do you enjoy about insurance specifically?

Stéphane Flaquet: I'm obviously heavily biased and I'm going to try and avoid as much as possible of the BS cliches and the cheesy responses. But I generally believe in the social purpose of insurance. I know it sounds really, really fake, but I generally believe in that. When I left banking and I came to work for insurance, I thought about it as just one more financial product that you push to a customer segment. And I was getting to know the insurance sector. I grew more fond of it as an industry and the product. Now, it might not be all insurance companies, all insurance products, but the one I've had the opportunity to experience. So I like the social purpose of it. I like the responsibility of protecting some of the most precious assets of your clients, whether it is their house, their belongings, or the company they've created. And just being there for them when they need you, sometimes at the most difficult period of their personal and professional life. And trying to put things right. We don't always do it right, but we try and put things right in a quick, empathic manner. I think that's something that I strongly believe in. And I enjoy being part of that. I love the combination of people and technology. And I think insurance is a great place if you like that combination of people and technology. As an industry, we're going through massive change as an organisation. And some people think that software is going to rule the world and all of the things we do are going to go away and be replaced by software. I personally don't believe that. I mean, if you remember some of the things we believe in on the Hiscox, this sentence is about technology when you want it, but people when you don't. And I really strongly believe in the combination of people and technology together. And I think insurance is a great place for it. And one of our target segments is small businesses. I mean, those guys are not specialists in insurance. They have so many other things to worry about. So whether it is as a first-time buyer, when you set up your business or when your business is evolving, or when you have your first plans. Having the ability to pick up the phone and talk to someone who's an expert and who's going to be able to guide you through that particular important moment in your life. I think it's quite unique as an opportunity. So I really like that combination. I do not believe that the human aspect of insurance is going to disappear, especially for specialist insurance companies like us. I think we have a key role to play in terms of just advisory and all of that. I also like the fact, and I'm going to sound a bit like a geek. Insurance is pretty simple. As it's called, it's a pretty simple principle, but it's actually a highly, highly technical industry. And I like the fact that I continue to learn new things despite having been in this industry for 16 years. I continue to learn new things. I get to work with pretty smart people. And also what I've realised over the last few years on the back of sort of the insurtech phenomenon, I've realised that actually nothing trumps the fundamentals of insurance. Understand your clients, try and understand their risk, select the right risk, get the pricing on the writing, reserve in a good place, manage your claims. All of that is actually getting the basics right. It's so fundamental. You can have the best website in the world and you can have the biggest marketing budget in the world. If you don't get the basics right in insurance, that can cost you a lot of money for a very, very long period of time. So I just like the fact that this industry is still very technical in nature and it requires a strong technical skill set. I like that, which allows me to continue to learn new skills.

Juan de Castro: One of the things you touched on was kind of these unique beliefs that we used to have and you have at Hiscox, which makes Hiscox on one side a traditional insurer, on the other side a different insurer than many others. And it's obviously, I mean, part of it because of its heritage, Robert Hiscox days, et cetera, but part of it because of the culture side. What makes Hiscox different? Why has Hiscox been so successful?

Stéphane Flaquet: Many, many, many reasons over many, many, many years. When you and I were in business school, we heard this thing from Peter Drucker, eat strategy for breakfast. And I think it's true, unless culture is your strategy. When I look back at Hiscox, obviously massive respect for what Bronek and the leadership team have done over the years of a conscious strategy of balanced portfolio between big ticket and retail, risk diversification, going direct before everybody else, digital enablement, strategic and geographic expansion, all of those conscious strategic choices, they have a lot of merits. But when I think about what makes and makes Hiscox so special, and what is the core of our strategy, I tend to think that this is our culture. And that culture is quite difficult to explain in words when you don't experience it. I think there's an element of entrepreneurship, just empower people to do things or measure the risk taking. There is definitely something about being patient and resilient. Building a business is never a straight line. You probably see that yourself today. It's a series of successes and drawbacks. I think historically in Hiscox, we've always felt like, okay, there is an opportunity. Let's take the time to build that business and not necessarily look for, quick return or quick payback. I think there's definitely a passion around building something quite different together. You mentioned Robert Hiscox. Apparently it's a quote from Robert that says “building a business is the funniest thing you can do with your clothes on”. And I don't know if it's true or not. I mean, Robert Hiscox could have perfectly said that. But when I look around some of the senior leadership in Hiscox and the fact that those people have been around for a while, there is definitely this sense of ownership and proprietorship of building something different that will last. I think when you look at this culture, the importance of the human factor, we talked about it in combination with technology, but just the way we live our values, the way we aspire to behave as individuals, with clients, with business partners, with suppliers, with candidates in an interview process or with employees, right? Or just like putting the human being at the centre of the purpose of the organisation. It's quite important. We did some work last year around refreshing our brand platform. And we came up with one of the tagline, which is, we see the people behind the policy. And for me, that sentence represents a little bit of the essence of Hiscox as an organisation. Trying to get to the uniqueness of a particular policyholder, a particular broker, or a particular employee, and treat them as individuals and human beings. So yeah, I think the reason Hiscox has been very successful historically and continues to be successful has a lot to do with the culture and the leadership and the way the leadership is behaving.

Juan de Castro: Yeah, that absolutely resonates from my experience at Hiscox. And obviously, pretty much every company in the world has a sheet of paper with the values written down. But then some companies actually live up to those values and actually drive the decision making and many others don't. And definitely at Hiscox, I did see that there were some difficult decisions being made based on the values. But that is quite challenging to maintain over time. So to some extent, I guess two questions in one, because ultimately, you mentioned Bronek earlier, Bronek retires and there's Aki taking the helm at Hiscox and every single level there are people who come and go. So how do you grow leaders in the company? How do you maintain that culture? And how do you kind of enable the evolution of a company like Hiscox through people? I think they are all related to each other.

Stéphane Flaquet: This is a really good one. And this is really tricky. Any organisation that is growing faces the same challenges. It was so easy when there were 50 of us on the same floor and then it went to a 1,000 and then 3,000. And how do you maintain that? So first of all, Hiscox as an organisation needs to continue to evolve. I think we shouldn't be thinking about all the good old days, it was so much better 10, 15 years ago. That's just not the case. It was just a very, very different company that needed just different capabilities. So the evolution is absolutely necessary to remain relevant. Um, the tricky bit is, how do you mature, evolve, grow up as an organisation? How do you build more professionalism and rigour in some of the things you do without losing the essence of what made you special in the first place? Because if you become yet another big insurance company and you lose on the way the things that made you unique in the first place, then that's obviously not a good thing. I think, where Hiscox has been very, very fortunate so far is actually the stability of senior leadership. So yes, Robert Hiscox is gone. Bronek is now gone. But I think there have been enough people around them for a long period of time to absorb the uniqueness of that culture and nearly pass it on to the next generation. If you see what I mean. But at the same time, there are things that need to change that are not only replicating what made us successful. There's some part of our organisation that needs to change. And that's what Aki and the rest of the executive committee are trying to do, which is very much capitalising on the great things that we have and that we need to build on. But also made the number of changes so that we can be a sort of a bigger, better version of ourselves. Right? I mean, Bronek used to tell us what got us here won't get us there, but that's exactly it. We've been successful for a period of time. Now we need to continue to evolve, to continue to be successful in the future. And leadership has a key role to play. How do you behave day in, day out? How do you maintain that organisational DNA that we're part of? Most importantly, because we enjoy operating in that environment and we want to protect it and expand it and get more people to benefit from it. That's the main thing. All of us have an opportunity to go and work somewhere else. We're not going somewhere else because I believe that this is the best place to work right now.

Juan de Castro: Obviously, leadership is always important, right? But leadership in a place like this is where you want to maintain what's made you successful while at the same time evolve. In that type of environment, it's even more important. So this might sound like a cheesy question, but do you have a definition for strong leadership? When you think about the role of leaders and building leadership at Hiscox, how do you think about it?

Stéphane Flaquet: This is a big one. This is just my personal view to start with. I haven't written any book on successful leadership, so that's just my experience. And I guess based on the kind of leader I have worked with and aspire to be, right? People I look up to, what do they have in common? I think strong leadership is able to set a vision and drive results through others. I think that's probably the number one attribute that I would say. So set the direction of travel. Where are we going as an organisation, as a department, as a function? In an ambitious, compelling, yet realistic fashion. And ideally, that sort of vision setting you try and do that in a sort of a consultative process, if you see what I mean. Go away in a cave and you come back and you say, oh, this is what we need to do in the next five years. I don't think it works because I think when you do vision setting or purpose setting, half of the value is in the process as opposed to the outcome. How do you engage with your leadership team, sort of broader management onto that journey? So setting the direction of travel is quite important.

Juan de Castro: I think that that is probably one of the biggest mistakes we've all made the first time we've led a functional team or whatever, which is thinking that the leader comes with the answer, that the leader is the one who needs to come up with the answer. And at the end, the leader is rather than that is probably more the one that engages the team to own the answer.

Stéphane Flaquet: 100%. It's an orchestrator, absolutely. So coming up with the original intent, where are we going as an organisation? But then, as importantly, delivering results to others. Sometimes I think ideas are easy, execution is everything. And I think just delivery, the ability to get stuff done, is definitely an underrated characteristic of leadership. Big strategic thinker, great communication ability, charismatic storyteller. All of that is important. But as is the ability to turn all of that nice story into action and results. And doing that through others is actually quite critical. And I think in my experience, very few people are good at both. The high level strategic thinking, the painting a rosy picture, and being able to deliver the result that follows. So that combination is quite powerful. For me, strong leadership is also around your ability to display vulnerability. I think the older you get, there's a lot of downside of getting old, as you know, Juan. But one of the few benefits is you get to know yourself a little bit better. And you know what you're good at and you know what you're not so good at. And I think the ability to transparently acknowledge and recognise your strength and your gaps, I think that's an attribute of leadership. Because once you've done that, you can do a couple of things. One, you can surround yourself with people who complement your own skill set. So that brings you the diversity of skills that you need to be able to deliver results. And then once you have that form of authentic leadership, where you're basically open and honest with your direct report and the broader organisation about who you are and what you think you can bring to a particular role. Then that authenticity brings some form of emotional connection that drives trust. And that trust is the foundation for everything else. When people trust you, then they can walk through walls with you or for you. So I think vulnerability, transparency, authentic leadership, being aware of your own limitations and being open about them, I would say that's probably the second attribute in my mind of effective leadership. And then the final point might be, ultimately, we're only as good as our people. And so as business leaders, our number one job is to attract, develop, retain talents and try and create an environment where people operate to their full potential. And by environment, I mean organisational structure, the right people in the right job, aligned objectives, performance management, effective communication, everything that is around running a functional business. But creating that environment, it's 50% of the job, probably.

Juan de Castro: So I think that you've got the three chapters of your future book. So you've got the vision, chapter one is set the vision while delivering results through others. The second one is about vulnerability. Then the third one is about attracting the best talent and creating the right environment.

Stéphane Flaquet: Hopefully, there's going to be a few more chapters. And I think you get inspired by the people you come across in your professional life, right? And you pick up a few things. When I worked in Spain a few years ago, I had the opportunity to work with the CEO of Bankinter, a gentleman called Jaime Echegoyen. And I was so impressed by his ability to have the big picture. So microeconomic environment, what's happening in the European and Spanish economy? What does that mean for the banking sector? What does it mean for his own bank? And then at the same time, he would be able to know how many mortgages have been sold in the branch in Cuenca last week. I also think that strong leadership is the ability to go from the really big picture, high level thinking to understanding some of the important details within your organisation and being able to navigate constantly between one and the other. That's quite tricky.

Juan de Castro: I think that is sometimes underestimated how difficult it is to go from the big picture to the details because I think that context switching is quite draining. Let's go back to Hiscox, priorities, transformation. Can you give us an overview of how Hiscox has been very successful in the past? You mentioned the need to keep evolving and adapting. How do you see the priorities in terms of transformation agenda for the next few years?

Stéphane Flaquet: Absolutely, yeah. I think Hiscox has experienced a couple of decades of strong growth. The company we are today is very, very different from the company we were 20 years ago, mostly because of the retail franchise that has developed very, very strongly in the UK, then in Europe, and then in the US. And I think that entrepreneurial culture that I was talking about has served us well just to build those new businesses. And we continue to have just a very big ambition around that growth agenda, especially around retail digital. So that hasn't changed. I think probably the next phase of our evolution is the desire to shift from growth to scale. If I look at the recent performance of the organisation, yes, we are able to grow, but in many cases we are growing our resources, people, software, third parties, pretty much at the same pace that we are growing our revenue. And I think that transition from growth to scale, that ability to drive operational leverage is one of the critical strategic objectives for us as an organisation. And certainly for me as CEO, because a lot of what we need to do from people process technology would obviously be either within my world or within my sphere of influence. So yeah, driving more operational leverage is one of the key priorities going forward. We are doing this through a number of levers. It's fundamentally about increasing your return on investment because as an organisation that is growing, we continue to invest massively. And it's about accelerating some of the return on that investment. So when you think about technology investments. How can you get increased value from the technology spent? How do you deliver change in a different way, which is more embedded within your business unit and function so that there's incremental value delivery? How can you reuse assets, build once and deploy multiple times across the organisation, especially around businesses who have a lot in common, like retail, for instance? So there's a lot more we can do to get technology even better connected to the business reality. We are obviously investing significantly in process improvement, automation, trying to increase the overall productivity of the organisation. We have a number of initiatives in flight at the moment in that space. A couple of months ago we communicated on some of the work we're doing with Google in the London market. So this is about sort of pushing that innovation agenda around how we can use technology to improve the service that we deliver to our clients or partners, increase internal productivity, improve decision making, all of the above. Like a lot of players in the sector, we are currently thinking about how can we maximise the usage of data and think about data slightly differently than we've been doing that historically. We're trying to push probably a bit of a cultural transformation on treating data as a product and having strong ownership of data as close as possible to the frontline, which is a big change for us as an organisation. Also reviewing the operating model. I mean, Hiscox, again, part of this historical success has been sort of that managed federation. So five business units operate relatively independently. And I think we're now reaching a point where we're trying to act much more as one company, bringing things together. To be able to drive more scale for the organisation. So there's a couple of pretty chunky pieces of work that we are working on, sort of multi-year initiatives that we are working on, as you said, just because they are the next stage of evolution for us as a company.

Juan de Castro: So ultimately, I really like the thing you summarised when you said you're shifting from growth to scale. And I think if I understood correctly, what you're trying to do is decoupling your top-line growth from your expense-based growth. And I think you gave a couple of really good examples, but they fall in two categories, sounds like, one is the way in which you drive change, and the second one is what change do you actually drive. And in this latter category, it's about driving productivity. They're really fascinating, one thing that piqued my attention was when you said you're thinking about data differently and you're thinking about data as a product closer to a front-end. Can you talk a bit more about that? What do you mean when you say think about data differently?

Stéphane Flaquet: Earlier, I talked about the opportunity that I have in my role to learn about new things. And data is one of those domains where I'm learning quite a lot at the moment. When I think about data, for us as an insurance company, I would say 100% of our 3,500 employees use this data to do their job, day in, day out, right? That's the only thing we do, right? Data. We don't manufacture anything. So everybody is a data user in Hiscox, fundamentally. A large percentage of our staff will actually transform data or and produce new data as part of their job. But when you ask around the business, okay, so 100% of us are data consumer. 80% of us are, let's say, data producer or transformer. Who is really a data owner? Show of hands, who is owning a subset of the data we use to run the business? Then you get very, very few responses. This concept of ‘I own a subset of the data within my business unit or my function’ is something that just does not exist at the moment in the Hiscox, and I suspect in many organisations out there. I believe that data is probably the second most critical asset as an organisation. But somehow we don't really treat it as an asset. We sort of treat it sometimes as a bit of a liability, something we have to do to run our business. And this is something that either finance or IT should take care of. Whereas in reality, no, this is an absolute asset. And the people who own a particular domain, whatever that is, a business unit, a function, a department, et cetera, et cetera, part of their job is to be the owner of the data they basically produce. And ownership means I am accountable for the quality, the availability, the exchangeability of that data with other parts of the organisation. I am conscious that the data that I produce today has a downstream impact on the rest of the Hiscox. That is a big cultural change for us.

Juan de Castro: But to some extent, I think one of the reasons historically that's been a challenge is because, well, pretty much every insurance company works in functions. So you've got the front office or the back office and the underwriters and claims. And I look at those as almost like verticals. When you look at data, really data crosses across many of those. Data is about, you need to start thinking less about functions and more as workflows or processes that often cut across many of those. So do you think that this also requires some level of change, not in org structure, but the way teams work with each other? And some organisations have tried to solve this through cross-functional teams where the cross-functional team owns a workflow and the data associated to that workflow. And that's across different functions. Are you doing something along those lines?

Stéphane Flaquet: Yeah, definitely. Cross-functional team. Also, just being very, very clear on where do you want to share that data and the value of it? So if you look at Hiscox, is there really a lot of value in sharing some data between our reinsurance business in Bermuda and our retail personal line business in the UK? No, there is no value in sharing that data. So where are your touch points? Which are the functions in the organisation that get value in bringing some of that data together? A lot of organisations historically have gone the route of the big enterprise data warehouse where everything data goes into a single pot and it takes you two years to do any change and it costs you $5 million. I don't think it's quite the answer. I think it's just understanding where that data exchange is necessary and where it's just don't even try. There's also beyond organisational structure and governance. There is a lot around master data management and the role of the functions in having clearly understood common definitions of key attributes. It's super boring, but wouldn't it be great if when we talk about conversion ratio or loss ratio or whatever, everybody understands this as being the same thing and it's broadly calculated in the same way? You're absolutely right, data is one of the functions that I'm currently responsible for. And this is, I think, the one where I find it the hardest. To make a short-term tangible impact to the organisation because it is so diffused and pervasive across the entire organisation. You can't put it in a box like any other function because it touches everything and everyone. And it's quite tricky. Having the right data leadership is very complicated because data is a highly technical domain, but you need some form of highly commercial leadership. Otherwise, you're just completely disconnected from reality. So it's quite tricky. But at the end of the day, that's all we've got as an insurance company. Everything we do is based on data. So it's not like we have a choice to get to a better place.

Juan de Castro: Definitely, but you said something there, which I think it's at the core of why many of these initiatives have failed, which is very quickly you get into boring stuff. MDMs, it just starts feeling technical. I think where you lose the room is when you start talking about defining a taxonomy you lose 90% of the room. So, well, this is my perspective. I would love to hear if you agree or not. It needs to be much more about, okay, what are the capabilities? So stop talking about taxonomies or MDMs. How about if we can talk about use cases and excite people around use cases?

Stéphane Flaquet: Absolutely. This is all the more relevant right now with the emergence of GenAI and all of that. There's a rush to do a lot of stuff because that's what we need to do because everybody else is doing it. So there's a real risk of a little bit of tech for tech, investment for the sake of investment because that's the right thing to do. So going back to, as you said, value cases, what are the questions we're trying to answer? Which business problem are we trying to solve? The rest is just a means to an end. But those boring stuff also need to be in place and you need to find some people to look after those for you because otherwise, you can make a real mess.

Juan de Castro: Two more questions for you. One is because we've talked quite a lot about leadership on one side and how to drive business performance, et cetera. On the other side, I introduced the episode saying you are no BS type of guy. So I want to get your perspective on a topic which often gets linked to BS, which is diversity. And I would like to get your honest point of view on that.

Stéphane Flaquet: Absolutely. First of all, so by diversity, my interpretation of diversity goes way beyond gender. Diversity, I mean diversity of background, origin, skill set, nationality, languages, way of thinking, etc., etc. And you and I, Spanish guy and a French guy talking in London, the centre of worldwide insurance, is, I guess, a pretty good example of that. So that's what I mean by diversity in its, I guess, broader sense. Research data has proven that diverse teams yield better results. Those are facts. So this is not a question of my opinion, your opinion, et cetera, et cetera. This has been proven by research and science. The way I like to think about this one is ultimately, this is about business performance. When I think about business performance, for me, business performance is the combination of capability and behaviour. Capability is the kind of skill set you have and how you exploit those skill sets in the organisation, the environments that you create so that those capabilities can be unleashed. So capability and behaviour. If you have a non-diverse team, what you have is massive overlap in the capabilities you have and probably quite a lot of similarity in the behaviour that you observe. Typically, when you have a diverse team, what you will bring, you will bring a lot more capability and a lot more variability in the behaviour that you experience and you benefit from. And the combination of both is exponential compared to what you can get from a non-diverse team. The best example of that in my own personal life, as you know, I led the technology function for Hiscox. In a room, technology leadership team, 10 people, 80% men, 40 to 45 years old, all with a computer science background. You get limited capabilities. They're all coming from the same background and doing the same things. And you have similar behaviour. That is one environment. After that, I had the opportunity to lead a European business. And you put in the same team, one German, one Dutch, one Spanish, one French, another writer, a marketing guy, etc., etc. The capabilities and the behaviour are completely, completely different. And the result you could get out of that diverse team is so much greater than what you can get from a non-diverse team. So diversity is not something you do to tick the DEI box and have a nice praise annual report. Diversity is something you do to increase business performance. This is not a charity thing. This is something that is the right thing to do to deliver better results for your organisation. Now, where it's getting a little bit tricky is that it takes a lot more effort and investment, as a leader, to get value from a diverse team, it's much harder to manage and lead a European team than it is to manage and lead a team of technologists. In order for you to get the superior outcome, not only you need to assemble that diverse team but you also need to have a leader that has the skill set to be able to extract that value. And that skill set, again, is not that common. And when you think about a very diverse team, like some of the teams we used to be part of, what brings all of those people together is not their technical area, because you have a marketing guy and an IT guy and an underwriting guy. What brings them together is the ability to create an emotional connection. What are we here for? What's the common purpose? What are we coming to work every day? So, yes, diversity is an absolute, absolute lever to increase business results. But it only works if you have a leader who is able to harvest the benefit of that diversity. Otherwise, it can be quite painful. And sometimes it can make everything a lot more complex. So, in a no BS way, I absolutely believe in diversity. I've seen the benefit of it. But it's training as a leader to get the most out of those diverse teams. It takes a lot of effort.

Juan de Castro: Definitely. And to wrap up the episode, I know you're a huge sports fan. I always remember when I used to go to your office late at night to have a quick chat and you always had like your rugby ball and all these pictures of rugby players with the signatures. So what type of learnings, of lessons do you apply from the sports world to your business world? Are there any analogies between the two?

Stéphane Flaquet: That's something that I'm obviously quite passionate about. And as you said, I have a huge bias for rugby as a sport. By the way, really good book to read, Juan, for you and your auditors. If you haven't read it yet, it's called Legacy. It's been written by a gentleman called James Kerr. And it's basically studying the most successful sports team in history, which is the All Blacks, the New Zealand All Blacks. If you look at data, you know, success rate, victory rate, etc., etc., over 100 years, the All Blacks are the most successful sports team in history. And what the book does, it basically looks at what makes the All Blacks so special. Why is the All Blacks a winning machine? And it comes down to culture. Again, the All Blacks culture that makes them such a successful organisation. So I highly recommend that book because there are a lot of parallels between the rugby world and the business world. So yes, of course, there's a lot of commonalities. We talked about the importance of creating, and maintaining the right culture and the right performance culture when you're talking about elite sport, of course. Having a common purpose, despite the diversity of roles in a team, sport team, whether you're a player or in your supporting staff management, everybody has a different role. But everybody needs to be rallied around a common purpose. And that's true also for business. Constant feedback loop and sort of brutal honesty. You finish the game, even if you win, what did we do well? What can we do better? No BS. Let's be open and honest with each other. I think this is something that we just probably don't do enough in the corporate world. The role of technology, I mean, we talked about it very briefly today. Modern sport, it's all about technology. Even some primitive, brutal sports like rugby, there's a lot of tech involved nowadays. And it's the same with business. It's a lot about technology. Incremental improvements, the famous 1% marginal gain. When you get to that level of performance as an elite sport, it's all about those incremental improvements, the small things you can do differently. So there's obviously lots of parallels. There's one big difference, in my opinion, between the world of sport and the world of business. And I think it's the following. In elite sports, you practise 95% of the time and you compete 5% of the time. And I think in all worlds, it's the other way around. We perform 95% of the time and unfortunately, we only practise 5% of the time. And practise for us is learning and development and training and all of that. And I think that's the big difference. As corporate animals, we have to perform most of the time. We don't get enough practice. And to be good at something requires repetition, like anything. It's just practice, practice, practice. So if I could do something slightly different in the corporate world, is have more practice time so that when we compete, we're better at it.

Juan de Castro: It's very interesting as you were going through some of those, examples about a common purpose, frequent, brutal, honest feedback, incremental improvements. I'm not a rugby fan, so I did not know about the All Blacks. But we were talking earlier about how those things apply to pretty much every high-performing team. So in the US, the Blue Angels. So these are the acrobatics, pilots. They do that. It's like after each flight, they get together, they give feedback to each other. They identify what things can they improve. Definitely, I think that is a theme across all high-performing teams. Stéphane, I was really excited about talking to you in this episode. And I had really high expectations. And I am so pleased that we found the time to do it together and catch up. As always, it's a great pleasure to talk to you.

Stéphane Flaquet: Thank you, Juan. Thank you for having me. And yes, it's been a great pleasure and a very enjoyable conversation.

Juan de Castro: That's amazing. I'll see you soon.